Changing the climate of social policy

By Michelle Chen Apr 10, 2009

The Obama administration has reportedly been wavering its plan to combat climate change. According to the Washington Post, the other steaming national priorities heaped onto Obama’s plate could set back his more ambitious environmental goals. That could mean deciding to auction off only a portion, not all, of the emissions allowances generated through cap-and-trade. Backtracking from the original proposal might impede the broader aim of using revenues skimmed from polluting industries to reinvest in public resources. Originally, the administration had envisioned tying cap-and-trade to a concrete budget issue: financing the “Making Work Pay” tax credit. The opposition, meanwhile, has argued that an aggressive cap-and-trade plan would amount to a “tax” on working people and unfairly burden business. Even congressional Democrats have chafed at the plan, arguing that cap-and-trade legislation is better left out of tax policy negotiations. Despite the politically inhospitable climate, a coalition of progressive groups is trying to turn the conversation back around to the nexus of social equity and environmentalism. In its mission statement, the newly launched Climate Equity Alliance begins not with the fiscal details of emissions regulation, but the fundamental cost of inaction:

Policies designed to limit greenhouse gas emissions and advance climate solutions must be aggressive and timely enough to ensure that the worst environmental and economic consequences of global warming are averted. Unchecked, the impacts of global warming will be costly for everyone, but they will likely hit low and moderate income people, including people of color, first and worst.

But the transition to a greener economy also requires some protection for the same environmentally and economically vulnerable communities:

Workers in older industries that are highly reliant on carbon based energy – and the communities in which they’re concentrated – must be provided with the assistance and tools necessary to make the transition to the emerging low carbon economy and to be competitive for good jobs within it.

The revenue culled from polluters, the coalition argues, “should be used to invest in the public good by ensuring an inclusive and fair transition to a high-road green economy, which advances the needs of workers, consumers, families, and diverse urban and rural communities while protecting the planet.” The Center on Budget and Policy Priorities, a member of the Alliance, testified before Congress last month about the need for a targeted “rebate” policy for the households that could be hard-hit by the green transition:

Giving away, or “grandfathering,” allowances is sometimes portrayed as a way to keep down costs for consumers, but that argument does not stand up to scrutiny. Rather, if allowances are given away free to polluting firms, only the firms and their shareholders would benefit.

Let’s see. Addressing a global catastrophe by coddling its main purveyors–sound familiar at all? While the finer points on allocating revenues are still up for debate, establishing a comprehensive cap-and-trade program would be an environmental policy breakthrough. But it may prove to be a pivot point for fiscal policy as well: will the system lead to a wholesale distribution of resources—both economic and ecological—to underserved communities, or will it, like so many other regulatory structures, be co-opted by the industries that got us into this mess? Image: Sean McGrath via Flickr